The San Antonio MSA has benefited greatly from the Eagle-Ford Shale. The area will continue to benefit from the energy boom in 2014 albeit at a slower pace. Drilling activity moderated in second half of 2012 through 2013 as natural gas prices declined from more than $6/mmBtu in 2007-08 to less than $4 in 2012-13. Cold winter weather in much of the U.S. has elevated demand and brought natural gas prices up to more than $5/mmBtu recently. Our forecasts indicate natural gas prices to be around $4-5/mmBtu through 2014 as the weather returns to normal. We expect most of the job growth for San Antonio in 2014 to come from sectors like health care, tourism and small businesses.
The unemployment rate in San Antonio is expected to decline at a slower pace as the oil and gas drilling boom continues to moderate. San Antonio added more than 6,200 non-farm payroll jobs to the economy in 2013, most of them coming from services producing and construction sectors. Consequently, the unemployment rate in the area declined to 5.8 percent in 2013Q4 compared to 6.0 percent in the last quarter of 2012. Year-over-year payroll job growth is expected to grow moderately towards the national average in 2014. Both single and multifamily housing starts were up in 2013Q4 after consecutive drops in the previous two quarters. We expect San Antonio’s housing market to improve moderately, consistent with job and income growth in the area.
San Antonio is one of the five so-called “Promise Zones” designated by President Barack Obama to fight poverty. The federal grant and support received from the program is expected to create jobs in key growth areas like energy, construction, healthcare and manufacturing. The program goals also include improving child enrollment in high-quality pre-K programs, improving early college enrollment and adult education opportunities, expanding public safety programs, affordable housing opportunities, and providing tax credits for private businesses upon approval by the Congress.
Click here for the complete San Antonio MSA Regional Economic Update: SanAntonio 2013Q4.